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THE MINISTRY OF TRADE

THE MINISTRY OF TRADE

CIRCULAR No. 10-TM/CP ISSUED ON THE 4TH OF AUGUST, 1994 GUIDING THE IMPLEMENTATION OF THE REGULATION ON ESTABLISHING OVERSEAS REPRESENTATIVE OFFICES OF VIETNAMESE BUSINESSES

In implementing Article 20 of the Regulation of Establishing Overseas Representative Offices of Vietnamese Businesses which is issued in conjunction with Decree No 40-CP of the 19th of May, 1994 of the Government, and upon consulting the concerned agencies and getting the approval of the Government (Note No 3921-QHQT of the 16th of July, 1994), the Ministry of Trade now issues detailed provisions on a number of points in the Regulation with a view to unifying the implementation:

1. On the subjects to be considered for licensing:

Vietnamese businesses of all economic sectors, irrespective of their business lines and level of management, can be considered for permit to establish their representative offices abroad provided that they have the qualifications stipulated in the Regulation. Concretely, these businesses include:

1.1. State-owned businesses;

1.2. Businesses which are established in accordance with the Corporate Law (Joint-Stock and Limited Liability Companies);

1.3. Businesses which are established in accordance with the Law on Private Businesses;

1.4. Businesses which are established in the form of cooperatives;

1.5. Businesses which are established in accordance with the Law on Foreign Investment in Vietnam.

2. On the qualifications for a business to be permitted to open its overseas representative office:

The businesses stipulated in Point 1 of this Circular which wish to be permitted to open their representative offices abroad must have the qualifications provided for in Article 5 of the Regulation, namely:

2.1. The businesses have got the license for establishment issued by the authorized State agency and have registered their operation in accordance with the current provisions of the Vietnamese law;

2.2. The businesses have the need to open their overseas representative offices to facilitate their marketing, the execution of their contracts in trade, service and/or economic and scientific-technological cooperation with customers in the host countries;

2.3. The businesses have legal financial resources to rent office space, purchase working facilities and equipment and ensure the normal activities of their representative offices in the host countries;

3. On the shared representative office for many businesses and the hiring of locals to work at the representative office:

3.1. In case two or more businesses satisfy the required qualifications but decide that it will be of low efficiency and high costs will incur if they open their own offices separately, they can arrange an agreement (in writing) on sharing a representative office abroad and assign one of them to apply for a permit from the Ministry of Trade.

3.2. Vietnamese businesses are prohibited from requesting overseas representations of the Socialist Republic of Vietnam and/or their officials and personnel to perform in any forms the tasks and powers of a business representative office provided for in Article 11 of this Regulation.

3.3. A business representative office of Vietnam shall comprise a person-in-charge (Head of the Representative Office) and its staff.

3.3.1. The person-in-charge (Head of the Representative Office) must be a Vietnamese national and belong to the staff of the business in the home country.

3.3.2. The business may hire foreigners or Vietnamese having settled in a foreign country under terms mutually agreed upon and conforming to the laws of Vietnam and the host country.

3.3.3. In special cases when the workload of the Representative Office is not large yet, the business can delay the sending of the person-in-charge (Head of the Representative Office) and only hire a staff with qualifications as stipulated in Point 3.3.2. of this Circular to discharge one or a number of tasks and powers of the Business Representative Office as provided for in Article 11 of the Regulation. In these cases, the Director of the Business shall assume the function of the Head of the Representative Office.

4. On the procedure to acquire permit for setting up an Overseas Representation Office:

4.1. A Vietnamese business which wishes to open a Representative Office abroad shall submit a file as required by Article 8 of the Regulation to the Ministry of Trade. The file shall comprise.

4.1.1. An application for establishing an Overseas Representative Office filed by the Director of the business.

4.1.2. Officially recognized copies of the founding license of the business and its business registration in accordance with current provisions of the Vietnam law.

4.1.3. Documents testifying to the need of the business to open a Representative Office abroad. They include agreements or requests on marketing (if any); contracts on trade, service and/or cooperation in economic activities and science and technology which determine the need to carry them out with customers in the host country.

4.1.4. A document of the business detailing the lawful financial resources to ensure the normal activity of its Representative Office abroad.

As for the State-owned businesses, their application file submitted to the Ministry of Trade shall also include a written approval from their founding agency (either the Ministry or the provincial or municipal People's Committee) allowing them to establish Representative Offices abroad.

4.2. Within 20 (twenty) days from receiving the complete and lawful file, the Ministry of Trade shall decide whether or not to permit the business to establish its Representative Office abroad. In case the permit is denied, the Ministry of Trade shall make a written reply clearly explaining the reasons for its denial.

4.3. After receiving from the Ministry of Trade the permit to open its Representative Office abroad, the business has the right to contact with the authorized agencies at the host country to make arrangements for the opening of its Representative Office in accordance with the law of the host country, and within 6 (six) months from the issuance of the permit by the Ministry of Trade, the business has to complete the opening of its Representative Office and report in writing it to the Ministry of Trade.

4.4. After 6 (six) months from the issuance of the permit by the Ministry of Trade, if the business has not opened its Representative Office, it has to report in writing to the Ministry of Trade, clearly explaining the reasons why it cannot and asking the Ministry of Trade to renew the permit (if it still has the wish to open its Representative Office), or the Ministry of Trade shall withdraw the permit in accordance with law.

5. On the procedure to close an Overseas Business Representative Office:

5.1. In case a Representative Office is to be closed in accordance with the provision of Article 17 of the Regulation, the business has to report in writing to the Ministry of Trade, clearly explaining the actual state of operation of the Office and proposing measures for solution.

5.2. On the basis of the report of the business and/or the assessment of Ministry of Trade within its jurisdiction, the Ministry of Trade shall decide to close the Overseas Business Representative Office.

5.3. The Business Representative Office shall be closed after 15 (fifteen) days from the date of the decision of the Ministry of Trade.

6. Implementation provision:

6.1. A Vietnamese business, which had opened its Representative Office abroad prior to the issuance of the Regulation and this guiding Circular and which wishes to continue the Representative Office, has to file a new application under the guidance of Point 4.1. of this Circular for a change of permit in accordance with the provision of Article 19 of the Regulation.

6.2. This Circular shall take effect as from the date of issuance and shall replace the previous regulations of the Ministry of Trade on the Overseas Representative Offices of the Vietnamese Businesses.

For the Minister of Trade

Vice Minister

MAI VAN DAU